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9/13/14

Brazil Presidential elections: The PT machine cranks it up, Dilma fights back

Marina Silva rode her wave, the world sat up and paid attention, Dilma Rousseff saw her lock on re-election evaporate and now....Dilma's PT party is getting serious. The latest Ibope voter intention survey out yesterday evening in Brazil has for the round one vote:
  • Dilma Rousseff (PT): 39%
  • Marina Silva (PSB): 31%
  • Aécio Neves (PSDB): 15%

Margin of error +/- 2%. And assuming there's a round two run-off between Marina and Dilma:
  • Dilma Rousseff: 42%
  • Marina Silva: 43%

Margin of error again +/- 2%. Which means Dilma's reversed the trend in both round one and round two intention and is now leading for October 5th by a decent cushion and, more importantly, in a technical dead heat for the big one having trailed Marina by six or seven points just a week ago.


The Nobel Committee officially regrets awarding Barack Obama the 2009 Peace Prize

The letter, dated yesterday September 12th, can be read in full here. This is how it starts:

"Prizes awarded by the Nobel Committee are not retracted. It remains the obligation of the Committee to disassociate itself from actions taken by laureates that frustrate rather than advancing the fraternity between nations and the abolition or reduction of standing armies. The Committee therefore joins with the public statements of several Nobel Peace Laureates in expressing its regrets over the conduct of the 2009 prize recipient."

It was the day the Peace Prize devalued itself, so the Nobel Committee's move to mitigate some of its stupid decision is welcomed. But don't be misled, this is too little too late and can't undo even half of the damage done to the reputation of the Peace Prize. 
























ps: yes i know it's a fake. it shouldn't be, though

9/12/14

The Friday OT: JS Bach, Chromatic Fantasy and Fugue (BWV 903), played by Friedrich Gulda

Don't get me involved with the debate about which version, how to play it, or even on what instrument. I tend to like them all in my simple pleasure way.


But this one is a cracker, viewed as a "straight played" version and by one of the great virtuosos as well. Recorded in 1964.



A Flash update...

...has just been sent to subscribers, 15 minutes before the opening bell on this very pleasant, warm and sunny Friday morning. Time to purchase something.

Pro-tip: Before flying into Buenos Aires Argentina, check on the weather forecast for hailstorms

Last Monday September 8th, an Air Europa flight from Madrid was 12 minutes away from landing at its destination in Buenos Aires Argentina when it found itself in the middle of a hailstorm. As those from the plains areas of Southeastern South America (Argentina, Uruguay, South Brazil) will know, the hailstones in these storm clouds can sometimes be frighteningly big and that's what the Air Europa pilot of the Airbus A330 (with 230 people on board) found out this week.




We're happy to report that the plane landed safely, which is testament to both crew and the build quality of the Airbus. Full report and more photos right here at the Reportur.com.ar page.


The directors of Fortuna Silver (FVI.to) $FSM have a message for shareholders of Fortuna Silver

Which is, "Maybe you should sell at any price over $5, just like we do".



Chart from here.

Zinc, top-ticked by the Wall St Journal's pump piece on the metal

You can set your Apple Watch to it (or just use it as a reminder to charge the thing). The WSJ on September 8th. "The world is running low on zinc", it starts and continues in the classic manner, throwing in a quoite from the bullish traders at the LME (who want to dump inventory...on you...as quickly as possible), tales of tight supply in China (where else?), but of course nary a word about all its small zinc mines that have been in mothballs for years and now that Zn climbed over $1 are being moved back into production.

And hours later, a big inventory jump in the LME and the price goes...


...my, what excellent timing, WSJ. They don't tell you that if it's in the newspapers it's too late for nothing, you know.

Chart of the day is...

...Rio Alto $RIOM versus B2Gold $BTG, 2014 year to date:


As pictures speak a thousand words, nothing else by way of comment today.

9/11/14

Checking in on the disaster that is the Argentine economy

Oh no! Argentina's economy going straight to hell and that's why...errr...its stock market is being bought hand over fist and zooming higher.


Errr, yes that's right, a stronger stock market means...errr... the country is in trouble.

Shut the fuck up gringos.

Your timely annual reminder of the Western world's attitude towards war, courtesy of George Carlin

Here's the post from a year and three weeks ago, below is the paste-out. Only extra comments needed for September 2014:
1) George Carlin was a genius. Thanks to recording technology, he still is.
2) It's now 22 years.
3) At the time of Carlin's show it was Iraq Part One. Last year was Syria, today it's ISIS. The future will offer further name tags and incarnations, la plus ça change.
So, on with the show. Your humble scribe now takes the rest of the day off and shows his newly arrived houseguest round the city. Hasta mañana, damas y caballeros.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

What's changed in the 21 years since this was taped?

1) VCRs don't get made anywhere these days
2) Name of the incumbent President
3) Geographic location of the latest war
4) Nothing else.



Chart of the day is...

...gold, which keeps going lower.

We're now lower than the low seen in the first days of June. Silver printing U$18.72/oz right now too, plenty under that "this is where it bounces" $19 level.

Buenaventura $BVN (BVN) tailings breach

This Thursday morning there are early reports of a tailings breach at the Buenaventura (BVN) mine at Orcopampa, South Peru. Locals complaining of cyanide waste on neighbouring agro lands, some talk of 30 tonnes of waste having been spilled, others telling that the sirens went off overnight at the mine for some reason that's probably connected.

UPDATE: Here's a news report (Spanish language) on the event. It's blaming broken tubing for the spill, which is from the tailings dam that's located just 1km from the local population centre.

9/10/14

Stop the Vultures

Here's a website of merit for your attention, an English language site all about the fight between Argentina and the (friends of theirs say) holdouts or (enemies say) vulture funds. Unusually for English language script the site takes an in-depth and detailed look at things from the pro-Argentina side so if only for that, it's a welcome addition to the debate. Nicely presented site too, plenty of background and facts to back up its argument.

It's called "Stop the Vultures", which makes its position clear enough. Go have a read, well worth it and as from this evening you'll also find the link over on the blogroll (over there on the right-->).


Gold costs and majors: Talk of the devil, Yamana $AUY edition

Yesterday, this post on the cost levels in gold mining today and insight on how production may get crimped by the current gold price.

Not even 24 hours later, this from Yamana (YRI.to) $AUY and the part on its Santa Luz mine in Brazil:

After careful and extensive review, and having allowed a sufficient period of time for optimization efforts, the Company has concluded that the optimal plan for C1 Santa Luz would be to temporarily suspend ramp-up activities, and put the project on care and maintenance while several identified alternative metallurgical processes are evaluated. 
The decision to temporarily suspend ramp-up activities at C1 Santa Luz and put it on care and maintenance is consistent with the Company's focus on maximizing cash flow rather than production only and protects the significant inventory of mineral resources that that would otherwise likely be lost permanently to tailings with the current recovery levels. 

A Flash update...

...has just been sent to subscribers, 45 minutes before the opening bell on this bright and sunny Wednesday morning. Four things about four stocks.

Cam Hui and Michael Pettis on the Pettis "long landing" scenario for China

Over at Humble Student of the Market a few days ago, Cam Hui wrote up a critique on Michael Pettis's fairly famous (in China-watching circles anyway) "long landing" theory for the country, which I digested without comment (I'm a know-nothing on China; no point in opening my ignorant mouth, every reason to read smart people on the country).

Well, it turns out that Michael Pettis replied to Cam Hui in a e-mail and later gave permission to publish said mail. You can read the debate right here and it's highly reco'd for anyone who'd like insight on China. 

Chart of the day is...

...the USD index:

1) Scotland Factor: The land of Nessie goes Yessy.
2) The British Pound (GBP) takes an almighty and well-deserved dump.
3) The US Dollar Index, under which the Greenback's relative strength or weakness is gauged, is 11.9% weighted to the GBP.
4) The dollar shoots up.
5) Everything priced in dollars goes down.
6 And as that's just about everything that's heavy if you have a bucketful of it, oil, zinc, copper, gold etc etc, we start to get the feeling about market influence that 51% of Scotland's 4.12 million registered voters get to exert on our interconnected world.

There's some sort of moral about how capitalism's inherent greed not always being so good for capitalists and how it needs to look after its less fortunate else eventually get bitten on the rear end by them, but it's a bit hazy at this point so let's leave it for another day. Because at the moment all the rich people are just too busy blaming each other. Fuckers.

9/9/14

Dear United Nations: Please stop sending your oversexed dumbasses to Peru, it's not good for them

Blogpal Life in Peru has tried to explain the concept of Peperas to a foreign audience previously. Let's re-quote the post by way of a reminder:
"....chicas peperas are girls that.............. get guys to buy them a drink, or bring the guys a drink themselves (servers typically don’t wear uniforms, so you don’t know). Next thing the poor guy knows is when he wakes up in the middle of the Plaza de Armas…
  • Where’s my wallet?
  • Where’s my cellphone?
  • Where are my clothes? What happened? (more here)

This humble corner of cyberspace has also tried its best to get the message across too. But apparently to no avail, because here's today's news, translated into English for your edification and education:
Two employees of the United Nations (UN) were assaulted in an apartment in Miraflores Lima, by a women who apparently knocked them out using a powerful sleeping drug.
The victims, one Spanish citizen and another French citizen, had arrived in Lima that same evening and had met a woman in a restaurant in the Plaza de Armas (main square).
Apparently after meeting her, the foreign nationals took the unknown woman back to an apartment. There they drank some beers and fell asleep.
When the employees of the international organization woke up they found they had been robbed of their cellphones, laptops and money to the value of approximately U$20,000.

Krugman forgets that there's more than one currency model in the world for Scotland to follow. Ecuador, for example

On his blog this morning, Paul Krugman shouts of the dangers Scotland would expose by becoming independent and keeping the Pound Sterling (GBP) as its currency. It would, according to Krugman, put itself at the mercy of the "Bank of....errr...England" (quote unquote) with all the systemic risk that would imply after Krugman pointed at the Eurozone and said bad bad isn't it awfully bad about it all. So two points to make:
1) In the event of an Indy Yes result England (using the name to generalize) would let Scotland use the pound because it suits England, not because of benevolence towards Scotland. Without the Scots, England's currency would be sorely weakened and that's bad for the printing country. The events of the last few days in the forex market make it abundantly clear, quantifiably clear, that it suits England to have Scotland inside its currency zone (just the way it suited England to have the entire geographical island of Ireland inside the pound sterling zone for a full 300 years). 
2) Seen Ecuador's economic performance recently, Krugger? High GDP growth, low inflation, constantly improving balance sheet, and all by using the US Dollar. The change there hasn't been in the currency, it's been in the stronger attitude to leadership. Scotland may have a problem in Alex Salmond in the medium-term, but adopting the Pound is not the base issue.
Once again, the good economist that is Krugman gets it horribly wrong when he starts to layer his suspect politics over the numbers. Though that doesn't make him an exception, it's fair to say that of most economists I've come across, left right or centre.

Silver goes under $19/oz

Chart, please:

Silver's touched under U$19/oz on five previous occasions in the last 12 months, on each occasion it rebounded. Maybe this time's different.

Technical analysis fap complete. Y'see, it's not that difficult is it?

More on gold mining costs

The blog Junior Gold Miner Seeker is doing its usual good job in covering and watching the metals and mining presentations and conferences, with this post on Saturday Sept 6th about last week's BofA/ML bash that gives links to some of the most interesting information from the gig. JGMS also features this chart...




...which was a good choice. All I've done is add some horizontal lines at 1k, 1.1k and 1.2k to make it easier to read. Although from the GG presentation and therefore GG's spinning the info for its own ends, the takeaway for me is the industry averages and how close we are to a whole bunch of majors running losses on operations, even before niceities such as G&A, financials etc are thrown into the corporate pie. That's either a) gold can't get much lower b) gold can get lower and put a people out of business c) both. Your call, reader.

Get all the info, all the links and all the fun over at the original JGMS post, right here. Worth your time to do so, metalhead.

Your obituary column of the day

Via Twitter, this obit excerpt is worthy of the attention of IKN's esteemed audience, for its general amusement and entertainment value. Translation below:


Above entry
del Castillo, Guillermo
Rest In Peace. Your wife Graciela and your children Pablo and Maria Laura painfully wish you farewell 

Below entry
del Castillo, Guillermo
Rest In Peace. My darling little fat guy, my Guille... Thank you for these five years of happiness. Your love forever, Susana.






More ideas for Reuters Peru for their precious metals coverage

As Reuters Peru has decided to use IKN as an unacknowledged centre of inspiration for their "exclusive" reports on metals and mining in the country, this humble corner of cyberspace would like to offer them another idea they can steal and use for their own corporate profit while pretending it to be original work and not giving an ounce of credit to source. *IKN author doffs cap gracefully*

So listen carefully Rooterz guys: First you stick the the production numbers for gold in your spreadsheet. Then you check out the monthly averages for gold price (we suggest using the London PM Fix). Then do a little math and you get the dollar value of gold produced in the country. And as this chart shows...


...here in 2014 we're now back to the revenue levels for gold in Peru that were last seen in early 2009, just after the world went FinancialSplat. We can even put that into percentage change terms, and here's a chart to visualize it:


In short, this slump isn't something new (what you'd imagine if you just read the "revelations" of Reuters), it's been a trend for the last two years. Which is why IKN has been covering the issue for that amount of time. Y'know...ethically.



9/8/14

And Curis (CUV.to) gets eaten by Taseko

Night of the long knives

Agnico (AEM) buys Cayden (CYD.v)

That's what the NR says.

AEM's right to use its paper to buy assets. I wish them luck in Guerrero. They'll need it

The results of following The Kitco Gold Survey for a year

As regulars know, we've been keeping an eye on just how accurate the experts are over at Kitco, the ones that the site asks every week for a call on what gold will do in the week to come. Last weekend finished a cycle of a year, which gives us a decent sample and a good idea of how accurate these people are.

Each week they're given one of three choices "bull", "bear" or "neutral". To gauge results, I assumed "neutral" to be between +0.5% and -0.5% of the previous week's close of GLD, with bulls winning above that and bears below.

As this chart shows (left to right) every week (date) they ask a number of participants (part) of which they get their weekly players (responses), who choose their preferred bracket (bull, bear, neutral). Then the chart gives the price of GLD that Friday evening and then the "result %" comes when next Friday's close is known. The final column no the right shows whether the majority of the experts surveyed by Kitco got the call right (and when the box is shaded in yellow), it was a week of a "strong opinion", when more than 50% of the experts made the same call


The result: After 52 weeks, the experts were right 17 times. That's to say, they score one in three on a survey that offers three choices. The same one-in-three ratio comes when you only count the "strong signal" weeks, too. They are indeed monkeys with dartboards and believing what these people say is a total waste of time.

The end.

The bet isn't on the streaming model, the bet is on the person running the streaming model

August 2014: Nolan Watson of Sandstorm (SAND) buys equities. Specifically, 19.5m shares of Luna Gold (LGC.to) at $1.02 per share.

August 2014: Pierre Lassonde of Franco Nevada (FNV) sells equities. Specifically, 8.375m freshly minted shares of his own company at U$59.75 per share.


As they say in the bookmaking world, bet the jockey not the horse.


Chart of the day is...

...a check-up on the progress Uranium has made:



Chart from here. The U bulls have had something to cheer their souls in the last couple of months, with the futures contract now off the floor and trading around $32/lb. However, the prediction your author made at the start of the year (when U was the metals to be on, according to the very same BS pumpers) is looking pretty solid. Here's exactly what was written as number 4 of our list of ten forecasts for 2014:
4) Uranium won't break $40/lb at any point and the sector will continue to get the rah-rah from the promo people still holding their large bags.
And I note that for what it's worth the rest of that little list isn't holding up badly, as long as you ignore the sporting calls. Better than other years, at least.

9/7/14

On climate change

After reading a very interesting note on the contentious issue of global warming, climate change and all that jazz, your humble scribe was prompted to reply in a mail to the author of the note with thoughts. I wrote back with a few random ideas and it turns out the other person liked it enough to tell me that it should be made public. So here it is, with a few small changes to protect both guilty and innocent and to make it reasonably coherent as a stand-alone piece (plus a link). 

Bottom line: My thoughts on climate change aren't about climate change.
I'll say one serious thing about the subject, as you have it on your mind today. A basic issue is the way in which this whole subject of Climate Change juxtaposes on the Maslow Hierarchy of Needs Triangle. You the concerned (and like it or not, you are the concerned otherwise you wouldn't publish on the issue) believe the issue to be a Level One physiological, which threatens everybody. Most of the rest of the world (I'm leaving my position out of this, trying to be observational only) consider it a Level 5 Self-Actualization issue, one that can wait until the other human needs are dealt with to their satisfaction. Or put another way, the problem of having no water isn't a threat for somebody who has water, it will stay as an abstract until some cruel and nasty reality comes a-knocking on the door. 

The mindset behind this is the same as the one that sees people die in the Australian outback every year because they didn't fill up a jerrycan of water and put it in the car. It's the mentality I come across in South America (and I've got used to it, can't say I like it but I can handle it these days) of placing trust in an everyday event to a third party who hasn't thought of any potential consequences, the thing goes wrong and then the other guy turns to you and says, "¿Y ahora que hacemos?", which is "And now what do we do?" and is always but always in the plural.  
The bottom line is that we humans are naturally (i..e. hardwired) lazy and will only attend to the concerns that most affect us. Maslow saw that, and worked out the order in which we solve problems. Climate change is something that you worry about, and quite rightly too, because you know where your next meal is coming from, you know where you can take your next shit hygienically, there's an opposite sexual organ waiting and available for you, you have a roof and a shirt etc etc. Therefore your neuroses have the luxury of the abstract while the vast majority of people don't care. What's more, the sector to which you're addressing your spiel is populated by people with potentially tenuous employment situations and mortgages (to generalize and characterize) so your concerns become a threat to them and to their most pressing needs. Hence pushback.


The IKN Weekly, out now



IKN 278 has just been sent to subscribers. Warm the pot first.

The Scotland referendum poll and the British Pound (GBP)

This weekend saw a poll showing 51% of Scots in favour of independence in the upcoming vote, 49% against. It's the first time the 'Yes' vote has led intentions and here's how the forex markets greeted the British Pound (GBP) as a result:


Splat.

My thanks to Twitterpal Ross for the headsup.